TheCorporateCounsel.net

In the most shocking discovery since Claude Rains learned that gambling was going on in Humphrey Bogart’s cafe in Casablanca, the WSJ recently reported that there are a whole bunch of stocks trading on Nasdaq that are currently trading below the $1 delisting threshold. Concerned investors are. . . well . . . concerned:

Companies with a share price below $1 can stay listed more than a year before Nasdaq kicks them off. Largely owing to the pileup of stocks below $1, around one in six Nasdaq-listed companies is running afoul of the exchange’s rules, Nasdaq data show.

“Exchanges are supposed to be gatekeepers and list only bona fide companies that have investor interest,” said Rick Fleming, a former SEC investor advocate. “If a bunch of companies aren’t really meeting those standards, it undermines the seal of approval that the exchanges are supposed to be imparting.”

Well, yeah, but Nasdaq and the NYSE are in the listing business, not the delisting business, so it isn’t surprising or even remotely scandalous that after they begin the delisting process, they give companies some time to come into compliance with the minimum listing standards. Not surprisingly, the WSJ says that most of the companies that find themselves in this boat are the product of the SPAC craze – which seems to me to be a better target for investor ire than the delisting process.

– John Jenkins